Tuesday, May 16, 2017

News From Congressman Eliot Engel


Engel Cosponsors MYDATA Act to Protect Internet Privacy

  Congressman Eliot Engel, a leading member of the House Energy & Commerce Committee, has cosponsored the MYDATA Act, a bill that would protect broadband users from unfair or deceptive practices relating to privacy or data security.

The MYDATA Act would give the Federal Trade Commission (FTC) jurisdiction over broadband providers, and would empower the FTC to promote rules that prohibit unfair and deceptive practices relating to privacy and data security across the Internet. As it currently stands, the FTC is unable to adequately protect consumers from these types of practices by broadband companies, due to a loophole in the Federal trade Commission Act.

“We live in a digital age which means controlling how our personal information is disseminated online is a difficult task,” Engel said. “Republicans in Congress and the White House have made it virtually impossible by allowing broadband providers to use and sell Americans’ sensitive information about their health, finance and families without their permission.  The MYDATA Act would help swing the pendulum back toward the consumer by giving the FTC the teeth it needs to establish safeguards for privacy and data security across the internet.

“Your personal information should not be a commodity for-sale to the highest bidder. We must take action to correct this glaring gap in the law on this crucial concern.”

The MYDATA Act was introduced by Rep. Jerry McNerney in May of 2017.  

ENGEL STATEMENT ON TRUMP'S REPORTED DISCLOSURE OF CLASSIFIED MATERIAL TO RUSSIANS

  Representative Eliot L. Engel, Ranking Member of the House Committee on Foreign Affairs, today made the following statement:

“I am shocked by reports that President Trump revealed highly classified information to Russian diplomats last week. This certainly raises questions about whether the President recognizes the serious implications of disclosing such sensitive information to an adversary.

“I will be meeting later this week with National Security Advisor McMaster in a classified session, and will seek answers about what was revealed and how it could damage American national security.

“It’s time for Congress to come together in a bipartisan way, establish an independent commission to investigate, and get to the truth.”

WHAT YOU SHOULD KNOW - It’s About Time for Senator Jeff Klein and Mike Gianaris to have a serious conversation



By Senator Rev. Rubén Díaz 
32nd Senatorial District, Bronx County, New York 


It’s About Time for Senator Jeff Klein and Mike Gianaris to have a serious conversation

You should know that it is sad to see the way in which the Leaders of the New York State Senate Democratic Conferences are allowing their Conferences to be the laughing stock of Albany.

It’s time for Senator Jeff Klein and Senator Mike Gianaris to sit down and have a serious conversation before they destroy the Regular and Independent Democratic Conferences, taking everybody down with them.

I, for one, learned my lesson in 2009 when I was a part of the Four Amigos: former Senators Pedro Espada, Carl Kruger, Hiram Monserrate, and myself.  Our search for power and equality almost destroyed the Senate Democratic Conference.

Now, in 2017, we are starting to see how both Democratic Conferences have become the target of the press and the topic of the day.

It is sad to see how workaholics and dedicated public servants, like Senator Diane Savino and others, are being thrown under the bus just because other people ambition for power.

I have to say that Senator Diane Savino never misses a Committee meeting, and is present at every event she can possibly attend.  She works hard and is dedicated to her duties and like others, deserves not only the stipend she receives, but more.

I am afraid that the power struggle and the personal dislike that Senator Jeff Klein and Senator Mike Gianaris feel toward each other could be the destruction of both Senate Democratic Conferences, taking other Members with them, even including some from the Republican Conference.

Ladies and gentlemen, the press is loving this. Since 2009, the press has been saying that Albany is full of corruption and that we are all corrupt. I am afraid that with these personal animosities, calling for investigations, and trying to destroy the reputations of others, we are going down the wrong path to achieve unity within the Democratic Conference and control of the Senate.

I would like to offer my 2 cents, and give my humble opinion to these two good Democrats and distinguished Senators Gianaris and Klein who have always shown their commitment, love and dedication to their community and party.

They should sit down and put aside any personal animosities they may have for each other, and have a serious conversation about the future of the Senate Democratic Conferences. Otherwise we will go back to 2009, and I know what I'm talking about.

I am Senator Rev. Rubén Díaz, and this is what you should know.

EDITOR'S NOTE:

State Senator Reverend Ruben Diaz Sr. is now running for the 18th City Council seat. We wish him well in that Democratic Primary.

ENOUGH SAID. 

Saturday, May 13, 2017

“BMB” Gang Associate Sentenced To 15 Years In Prison In Connection With 2011 Shooting Of Eight People


  Joon H. Kim, Acting United States Attorney for the Southern District of New York, announced that ONEIL DASILVA, a/k/a “Soxx,” a/k/a “Bobby Soxx,” an associate of the violent Big Money Bosses (“BMB”) street gang, was sentenced today to 15 years in prison in connection with a shooting in 2011 at a backyard party in the Bronx, New York, during which eight people were shot, including a 13-year-old girl and a 14-year-old girl.  DASILVA pled guilty on December 8, 2016, before United States District Judge Alison J. Nathan, who also imposed today’s sentence.
Acting U.S. Attorney Joon H. Kim said:  “Oneil Dasilva, a Big Money Boss gang associate, terrorized his neighborhood in the Bronx, engaging in a reckless shooting spree that led to eight people, including two young teenagers, getting shot. For his crimes, Dasilva will now spend 15 years in a federal prison. Gang and gun violence must be confronted forcefully, as we did in this case with our law enforcement partners.”
According to the Indictment and other documents filed in the case, as well as statements made during the plea and sentencing proceedings:
DASILVA was an associate of BMB, a subset of the “Young Bosses,” or “YBz” street gang, which operates throughout New York City.  Between 2007 and 2016, members and associates of BMB committed numerous acts of violence against rival gang members in the Bronx and sold crack cocaine and marijuana.  
As part of his involvement in with BMB, on September 4, 2011, DASILVA opened fire at a backyard barbeque in the vicinity of 221st Street in the Bronx.  Eight people were shot, including a 13-year-old girl and a 14-year-old girl.  All of the victims survived.  
DASILVA was arrested in this case as a result of a multi-year investigation by the New York City Police Department’s Bronx Gang Squad (the “Bronx Gang Squad”), U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Violent Gang Unit (“HSI”), the New York Field Division of the Drug Enforcement Administration (“DEA”), and the Joint Firearms Task Force of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) into gang violence in the Northern Bronx. DASILVA was charged in an Indictment unsealed on April 27, 2016 (United States v. Nico Burrell et al., 15 Cr. 95), charging 63 members and associates of BMB with racketeering conspiracy, narcotics conspiracy, narcotics distribution, and/or firearms charges.  To date, 47 of these defendants have pled guilty.
Mr. Kim praised the outstanding work of the NYPD’s Bronx Gang Squad, HSI, DEA, and ATF.  

Bronx Week Community Board Member Celebration


  Thursday night Bronx Borough President Ruben Diaz Jr. invited all twelve Bronx Community Board members to a celebration of the members volunteer work for their respective community board. There are twelve Bronx Community Boards which can have up to fifty members which include the local City Council members (in a non voting position) if their council district overlap a community board. 
  There was a good turnout of Bronx Community Board members, and there were special treats for the board members to taste from various Bronx eating establishments. 


Above and Below - BP Diaz Jr. took some photos with board members who arrived before the ceremony.




Above - Members from Community Board 7.
Below - Members from Community Board 8.




Above - BP Diaz Jr. speaks with his coordinator of Bronx Community Boards Mr. Tom Lucania as the BP enjoys a piece of delicious Lloyd's Carrot Cake, one of the special treats of the night.
Below - Members of the Star of the Sea Cadets get ready to present the colors as the ceremony is about to start.


Acting Manhattan U.S. Attorney Announces $5.9 Million Settlement Against Real Estate Corporations Alleged To Have Laundered Proceeds Of Russian Tax Fraud


Defendant Prevezon Holdings Ltd. Agrees to Pay $5,896,333.65, Triple the Fraud Proceeds Alleged to Be Directly Traceable to the Defendants 

  Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced today that the United States has settled a money laundering and civil forfeiture action against assets of 11 corporations, including some that own luxury residential and high-end commercial real estate in Manhattan. The Government’s complaint alleged that the defendant corporations laundered some proceeds of a $230 million Russian tax refund fraud scheme involving corrupt Russian officials that was uncovered by Sergei Magnitsky, a Russian lawyer who died in pretrial detention in Moscow under suspicious circumstances and was posthumously prosecuted by Russia.

In the stipulation of settlement filed with U.S. District Judge William H. Pauley III today, which is still subject to approval by the Court, one of the defendant corporations, Prevezon Holdings Ltd., agrees to pay $5,896,333.65 to resolve the Government’s claims against all defendants. This payment represents triple the value of the proceeds that the Government alleged could be traced directly from the Russian treasury fraud to the defendants ($1,965,444.55), and more than ten times the amount of proceeds the Government alleged could be traced directly to property in New York (approximately $582,000).

Acting Manhattan U.S. Attorney Joon H. Kim said: “We will not allow the U.S. financial system to be used to launder the proceeds of crimes committed anywhere – here in the U.S., in Russia, or anywhere else. Under the terms of this settlement, the defendants have agreed to pay not just what we alleged flowed to them from the Russian treasury fraud, but three times that amount, and roughly 10 times the money we alleged could be traced directly into U.S. accounts and real estate.”

The Government’s lawsuit alleged as follows:

In 2007, a Russian criminal organization engaged in an elaborate tax refund fraud scheme resulting in a fraudulently obtained tax refund of approximately $230 million from the Russian treasury. As part of the fraud scheme, members of the organization stole the corporate identities of portfolio companies of the Hermitage Fund, a foreign investment fund operating in Russia. The organization’s members then used these stolen identities to make fraudulent claims for tax refunds.

In order to procure the refunds, the criminal organization fraudulently re-registered the Hermitage companies in the names of members of the organization, and then orchestrated sham lawsuits against these companies. These sham lawsuits involved members of the organization as both the plaintiffs (representing sham commercial counterparties suing the Hermitage companies) and the defendants (purporting to represent the Hermitage companies). In each case, the members of the organization purporting to represent the Hermitage companies confessed full liability in court, leading the courts to award large money judgments to the plaintiffs.

The purpose of the sham lawsuits was to fraudulently generate money judgments against the Hermitage companies. Members of the organization purporting to represent the Hermitage companies then used those money judgments to seek tax refunds. The basis of these refund requests was that the money judgments constituted losses eliminating the profits the Hermitage companies had earned, and thus the Hermitage companies were entitled to a refund of the taxes that had been paid on these profits. The requested refunds totaled 5.4 billion rubles, or approximately $230 million.

Members of the organization who were officials at two Russian tax offices corruptly approved the requests within one business day, and approximately $230 million was disbursed to members of the organization, purportedly on behalf of the Hermitage companies, two days later.

After perpetrating this fraud, members of the organization undertook illegal actions in order to conceal this fraud and retaliate against individuals who attempted to expose it. After learning of the lawsuits against its portfolio companies, Hermitage retained attorneys, including Russian lawyer Sergei Magnitsky, to investigate. Magnitsky and other attorneys for Hermitage uncovered the refund fraud scheme, and the complicity of Russian governmental officials in it, and were subject to retaliatory criminal proceedings against them. Magnitsky was arrested and died approximately a year later in pretrial detention. An independent Russian human rights council concluded that Magnitsky’s arrest and detention were illegal, that Magnitsky was denied necessary medical care in custody, that he was beaten by eight guards with rubber batons on the last day of his life, and that the ambulance crew that was called to treat him as he was dying was deliberately kept outside of his cell for more than an hour until he was dead.

Members of the criminal organization, and associates of those members, have also engaged in a broad pattern of money laundering in order to conceal the proceeds of the fraud scheme. In a complex series of transfers through shell corporations, the $230 million from the Russian treasury was laundered into numerous accounts in Russia and other countries. A portion of the funds stolen from the Russian treasury passed through several shell companies into Prevezon Holdings, Ltd., a Cyprus-based real estate corporation that is a defendant in the forfeiture action. Prevezon Holdings laundered these fraud proceeds into its real estate holdings, including investment in multiple units of high-end commercial space and luxury apartments in Manhattan, and created multiple other corporations, also subject to the forfeiture action, to hold these properties.


A chart listing the companies named as defendants in the lawsuit is attached.

Mr. Kim praised the outstanding investigative work of ICE HSI New York’s El Dorado Task Force.


Prevezon Holdings, Ltd.
Prevezon Alexander, LLC
Prevezon Soho USA, LLC
Prevezon Seven USA, LLC
Prevezon Pine USA, LLC
Prevezon 1711 USA, LLC
Prevezon 1810, LLC
Prevezon 2009 USA, LLC
Prevezon 2011 USA, LLC
Ferencoi Investments, Ltd.
Kolevins Ltd.
Attachment(s): 

Owner Of Utah-Based Pharmaceutical Wholesale Distributor Sentenced To 60 Months In Prison For Role In $100 Million Black Market Medication Scheme


  Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that RANDY CROWELL, a/k/a “Roger,” was sentenced today to 60 months in prison for fraudulently distributing, through his Utah-based wholesale distribution company, more than $100 million worth of prescription drugs obtained through a nationwide black market. The defendant distributed the drugs in question, which were predominantly used to treat HIV/AIDS, to pharmacies, where they were dispensed to unsuspecting patients. As part of his sentence, CROWELL also agreed to forfeit more than $13 million in personal profits from the scheme and was ordered to pay an additional $65 million in restitution to Medicaid. CROWELL pled guilty on January 6, 2017, to one count of conspiracy to commit healthcare fraud before United States District Judge Edgardo Ramos, who also imposed today’s sentence.
Acting Manhattan U.S. Attorney Joon H. Kim said: “For more than two years, Randy Crowell personally profited from perverting a system designed to ensure patients receive safe and effective medication. He victimized healthcare companies and government benefit programs, as well as countless people suffering from life-threatening illnesses. The recipients of Crowell’s black market medications had no way to know that the medicines they purchased at pharmacies might be dangerous.”
CROWELL’s sentence marks the culmination of a six-year investigation by the U.S. Attorney’s Office in conjunction with the Federal Bureau of Investigation into a massive, nationwide healthcare fraud scheme involving the resale of black market medications worth more than $500 million. Including CROWELL, 57 defendants have been charged and convicted for their roles in the scheme. Through these prosecutions, hundreds of millions in restitution and criminal forfeiture have been recovered for victims, including Medicaid.
According to the allegations contained in the Indictment and other documents filed in the case, as well as statements made during the plea proceedings:
From early 2010 until at least July 2012, CROWELL, who was the owner and operator of a licensed wholesale distributor of prescription medications based in St. George, Utah (“Wholesaler-1”), participated in a sophisticated scheme to defraud health insurance companies and government programs such as Medicaid out of hundreds of millions of dollars by trafficking prescriptions through a nationwide black market. CROWELL, through Wholesaler-1, purchased more than $100 million worth of prescription medications from this black market at a fraction of the legitimate prices for these drugs, before selling the same as new, legitimate bottles of medication to pharmacies all over the country.
To maximize their profits, CROWELL and his co-conspirators focused on some of the most expensive medications on the market, including those used to treat HIV/AIDS. The profitable scheme was potentially dangerous to the tens of thousands of patients ultimately receiving and taking these prescription drugs. Many of the bottles purchased through the underground market and then distributed as safe, legitimate medications by CROWELL and Wholesaler-1 had in fact been previously dispensed to others, including individuals based in the Southern District of New York. To conceal the fact that they had been previously dispensed, the bottles were typically “cleaned” with hazardous chemicals such as lighter fluid before being transported and stored in conditions that were frequently unsanitary and insufficient to ensure the safety and efficacy of the medication.
Rather than purchasing medications from manufacturers or legitimate authorized distributors at full price, scheme participants, including CROWELL, created and exploited an underground market for these prescription drugs. Scheme participants targeted the cheapest possible source of supply for these drugs – Medicaid patients and other individuals who received these prescription drugs on a monthly basis for little or no cost, and who were then willing to sell their medicines rather than taking them as prescribed (the “Insurance Beneficiaries”).
Insurance Beneficiaries had prescriptions filled for medications each month at pharmacies across the country, including in Manhattan and the Bronx, and then sold their medications to low-level participants (“Collectors”) in the scheme who worked on street corners and bodegas and would pay cash – typically as little as $40 or $50 per bottle. Health care benefit programs would not have paid for the medications issued by pharmacies to the Insurance Beneficiaries had these health care benefit programs known that the Insurance Beneficiaries were selling their drugs to others, rather than taking them as prescribed.
Collectors then sold these second-hand drugs to higher-level scheme participants (“Aggregators”) who bought dozens, and sometimes hundreds, of bottles at a time from multiple collectors before selling them to higher-level scheme participants with direct access to legitimate distribution channels, including corrupt wholesale companies like Wholesaler-1. The corrupt wholesale companies, including Wholesaler-1, then resold the bottles as new, at full price, to pharmacies, including potentially the very same pharmacies that initially dispensed these medications. In so doing, CROWELL and other corrupt wholesale companies intentionally misrepresented where these medications were coming from and, in particular, concealed the fact that these prescription drugs had been obtained from an illegal and illegitimate black market.
Between 2010, when Wholesaler-1 was created by CROWELL, and July 2012, Wholesaler-1 had no legitimate sources of supply. Instead, CROWELL caused Wholesaler-1 to purchase exclusively from illegitimate sources – including the so-called “Aggregators” – who sold to CROWELL at substantially reduced rates, sometimes as much as 50 percent less than the price of acquiring these medications from legitimate sources. Consistent with their illegitimate origins, inbound shipments of prescription drugs frequently arrived at Wholesaler-1 improperly packaged in unsealed, unsecure cardboard boxes. On some occasions, bottles of medication arrived at Wholesaler-1 with the initial patient labels still affixed to them. On other occasions, bottles arrived having already been opened, or containing what appeared to be the wrong medication. At the direction of CROWELL, employees of Wholesaler-1 then inventoried these bottles, attempted to remove any bottles that still had patient labels affixed to them or were otherwise visibly used or damaged, and then arranged for the medications to be shipped out to Wholesaler-1’s customers – pharmacies all over the country, including pharmacies in Manhattan and the Bronx.
To effectuate the scheme – and, in particular, to convince pharmacies to buy these medications, and health care benefit programs to pay for them, CROWELL and others made false and fraudulent representations about the origins of these medications. Specifically, CROWELL and others acting at his direction created false and fraudulent documents known as “pedigrees” for these medications, which purported to document the legitimate movement of these medications bought and sold by Wholesaler-1 from a manufacturer to the pharmacy.
In order to evade detection, CROWELL took additional steps to conceal the unlawful nature of his activities, including using the name “Roger,” frequently changing or “dropping” the phones he used to communicate with co-conspirators, and paying co-conspirators through front or “sham” companies.
In addition to the term of imprisonment, CROWELL, 56, of Henderson, Nevada, was sentenced to three years of supervised release, ordered to forfeit $13,046,635.00, and ordered to pay restitution of $65 million to Medicaid.
Mr. Kim praised the investigative work of the FBI.

Former Harlem Restaurant Owner Pleads Guilty To Engaging In Multimillion-Dollar Ponzi Scheme


Hamlet Peralta Told Investors He was Financing Large Wholesale Liquor Purchases, and Instead Used Money to Fund His Lavish Lifestyle and to Pay Back Other Investors

  Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that HAMLET PERALTA pled guilty today to wire fraud in connection with his scheme to obtain money from investors by fraudulently representing that he was using their investments to further a profitable, multimillion-dollar wholesale liquor business. PERALTA pled guilty before United States District Judge Katherine B. Forrest. Sentencing has been scheduled for September 8, 2017, at 10:00 a.m.
Acting Manhattan U.S. Attorney Joon H. Kim said: “Hamlet Peralta swindled millions of dollars from unsuspecting investors who trusted him because of his reputation in the community as a business owner and restaurateur. As Peralta has now admitted, instead of being an honest broker, he stole their money and used it to fund his own lavish lifestyle and to further a massive Ponzi scheme.”
According to the Complaint and Indictment filed in Manhattan federal court and today’s plea proceeding:
From 2013 through 2014, PERALTA solicited more than $12 million from multiple investors by falsely representing that the investors’ money would be used to engage in wholesale liquor distribution for a profit. He made these promises both orally and in written contracts. To bolster the supposed bona fides of his fictitious business, he provided investors with forged invoices and other documentation, purporting to establish the high volume of liquor he both bought from licensed wholesalers in New York and sold to wholesale and retail clients for a profit.
In truth and in fact, however, PERALTA misappropriated the millions of dollars in investments he received. He took out much of the money in cash and used some of it to both support his lifestyle and rehabilitate a failing restaurant he owned. Because he purchased very little liquor and had no profits with which to pay back investors, he then began borrowing large sums of money from new investors on the false promise that he was investing that money in the liquor business, and used that money to repay prior investors.
In or about 2013, for example, PERALTA told a prospective investor (“Investor-1”) who was a frequent customer at PERALTA’s restaurant and who had become friendly with PERALTA that he (PERALTA) owned a separate business called West 125th Street Liquors and that he had been approved as an exclusive wine distributor to a major national restaurant supply company (the “Restaurant Supply Company”) that was beginning a wholesale wine business. PERALTA told the investor that he would receive significant interest on his investments, based on profits from the wholesale liquor distribution business. In truth and in fact, however, PERALTA did not own West 125th Street Liquors, and he had not been approved to be a distributor for the Restaurant Supply Company. Indeed, neither PERALTA nor West 125th Street Liquors ever supplied anything to the Restaurant Supply Company. PERALTA also provided vestor-1 with fake documentation on the Restaurant Supply Company’s letterhead, falsely representing that the Restaurant Supply Company would be electronically transferring PERALTA $1,826,350 within seven days.
Investor-1 provided PERALTA with more than $3.5 million over the course of the next year, a substantial portion of which was used to pay back other investors. Ultimately, PERALTA owed Investor-1 approximately $2 million. In all, PERALTA, who obtained approximately $12 million from investors, failed to pay back millions of dollars of that money.
PERALTA, 37, of the Bronx, New York, has pled guilty to one count of wire fraud, which carries a maximum term of 20 years in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Kim praised the investigative work of the Federal Bureau of Investigation and the NYPD Internal Affairs Bureau.

A.G. Schneiderman Announces Joint $54 Million Settlement With Carecore Resolving Allegations Company Submitted Millions In False Claims To Medicaid


NYs Medicaid Program To Receive Over $7.6 Million In Restitution As Part Of Joint State-Federal Settlement

  Attorney General Eric T. Schneiderman announced today that New York, along with 20 other states, has reached an agreement in principle to join the federal government in a settlement with CareCore National LLC (CareCore), now part of eviCore healthcare that was unsealed today. CareCore provides utilization management services including determinations of medical necessity to New York Medicaid Managed Care Organizations (MCOs).  The agreement settles allegations that CareCore instituted a scheme to auto-approve or Process As Directed (PAD) hundreds of radiology service requests on a daily basis, deeming those diagnostic services as reasonable and medically necessary, even though there had been no evaluation of those cases by the appropriate medical personnel. CareCore will pay the federal government $54 million, of which $18 million will go to the state Medicaid programs, to resolve allegations that CareCores fraudulent PAD program caused false claims to be submitted to government health care programs. Of the $18 million, New Yorks Medicaid Program will recover over $7.6 million.    
 “Companies that overbill Medicaid are undermining efforts to help some of our neediest citizens. Since 2011, my office has secured over $1 billion in restitution for Medicaid, and we will continue to vigorously safeguard the integrity of this incredibly vital program,” said Attorney General Schneiderman. 
Specifically, the agreement in principle resolves allegations that from January 1, 2005 through June 13, 2013, CareCore developed and implemented the “PAD” program through which CareCore improperly approved over 200,000 prior authorization requests which CareCore initially determined could not be approved based on the information provided.  The states’ settlement in principle mirrors the federal settlement agreement regarding CareCore’s conduct that is the subject of the settlement. The federal settlement agreement was filed in federal court and contained CareCore’s admissions and acceptance of responsibility for conduct including: 
  • Starting in at least 2007 through June 13, 2013, CareCore developed the “PAD” program, and thereafter the “PAD” Program consisted of its Clinical Reviewers improperly approving certain prior authorization requests awaiting physician review on the Medical Queue without having obtained any new objective medical information about the requests, and without a Medical Director having independently reviewed the prior authorization requests. 
  • From 2007 through June 13, 2013, these “padded”requests were then transmitted to CareCore’s client insurers, including MCOs, as preauthorized requests.  
  • From 2007 through June 13, 2013, when CareCore approved these padded requests, CareCore made a representation that it had appropriately reviewed the requests when it knew it had not. Thus, those padded requests incorporated CareCore’s false representation that it had approved a case after completing the required review process.
The settlement in principle resolves claims that CareCore auto-approved the requests in an effort to keep up with the volume of preauthorization requests for diagnostic radiology services and to avoid a contractual monetary penalty per case for untimely reviews.  The settlement in principle also resolves claims that this practice caused false or fraudulent claims to be submitted to and reimbursed by the State’s Medicaid program, including through its contracted MCOs, for diagnostic procedures that were not properly authorized as medically reasonable or necessary in a manner consistent with the policies and procedures set forth by New York’s Medicaid program and its contracted MCOs, using federal and state funds provided through Medicaid Managed Care.  
The settlement in principle resolves allegations asserted in a qui tam action brought by a whistleblower in the United States District Court for the Southern District of New York. A multi-state team, which included New York’s Medicaid Fraud Control Unit, participated in the investigation and conducted the settlement negotiations with CareCore on behalf of the states. The team also included representatives of the Florida, Georgia and Ohio Medicaid Fraud Control Units. The states coordinated their investigation in conjunction with the U.S. Attorney’s Office for the Southern District of New York.